Patina Oil & Gas Corp. has increased the size of its revolver and enlisted five new banks to provide the extra capacity. The new $500 million, four-year facility replaces a $200 million facility that was set to expire in July. The reason for the increase is two-fold, according to David Kornder, executive v.p. and cfo. Patina is looking to use the facility to assist in funding a number of acquisitions and accommodate the larger company, he said. The company recently announced plans to acquire the remaining half of a joint venture Elysium Energy. This move comes on the back of purchasing Bravo Natural Resources and Le Norman Energy Corp. late last year.
Comerica Bank, Bank of Oklahoma, Bank of Scotland, BNP Paribas, and Compass Bank join Patina's Bank One-led lending group for the first time. Wachovia Bank and Wells Fargo serve as syndication agents. In addition, Bank of America and Credit Lyonnais round out the bank group as documentation agents.
The revolver is priced on a grid tied to the company's debt-to-EBITDA multiple. The range is currently set between LIBOR plus 11/ 4% to 2%. That pricing represents a slight increase from the company's former $200 million revolver, which carried a spread range of 1-2% over LIBOR. Kornder said the higher price was market driven. A borrowing base for the new credit is set at $300 million at the company's request.